Legislators Want UHF Discount Rule Change to Grandfather Pending Transactions
Two chairs of House panels that oversee the FCC don’t want the elimination of the UHF discount to “punish business” by affecting existing ownership groups or pending transactions, they said in a letter to acting Chairwoman Mignon Clyburn Thursday (http://1.usa.gov/1aHA9VF). “Specifically, we are concerned that elimination of the UHF discount could inequitably harm those broadcast owners with pending transactions that were initiated under the existing UHF discount rule,” said House Commerce Committee Chairman Fred Upton, R-Mich., and Communications Subcommittee Chairman Greg Walden, R-Ore.
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Though no commissioner’s office would comment on Walden and Upton’s letter, an FCC official told us that as expected (CD Sept 10 p5), a new version of the draft NPRM on the discount began circulating Friday that proposes grandfathering for pending transactions and existing ownership combinations. Although eliminating the UHF discount is just a proposal in a draft NPRM, the committee chairs sent the letter to express concerns about the proposal before the rulemaking process moves forward, a committee aide told us.
The draft NPRM is set for the commission’s Sept. 26 open meeting. An earlier version on circulation had proposed letting in existing ownership groups under the old rule but applying the new calculation to any deals pending between the rulemaking’s issuance and when an order is adopted (CD Aug 6 p1). The pending transaction most likely to be affected by the rule change is Tribune’s deal to buy Local TV, which would put the company at 42.7 percent without the UHF discount (CD Aug 14 p1). The FCC caps ownership at 39 percent of viewers nationwide.
Congressional pressure can affect the way commissioners vote, but doesn’t always swing an issue, said former FCC Commissioner Robert McDowell in an interview. “Members of Congress have to accommodate constituent concerns that may not be in line with a particular commissioner’s philosophy,” said McDowell. “That’s the beauty of an independent agency.”
The effect of Upton and Walden’s letter may also be lessened since it concerns the launch of a rulemaking rather than a decision on an actual rule, said public interest lawyer Andrew Schwartzman, formerly of the Media Access Project and a longtime opponent of the UHF discount. “Regardless of what the vote is, this doesn’t actually create a new rule,” he said. The FCC has the authority to change its TV ownership rules, Schwartzman said.
Along with eliminating the UHF discount, the commission should institute a VHF discount, said VHF station owner PMCM TV in an ex parte filing Friday (http://bit.ly/1dbBv8E). A VHF discount is one of the proposals included for comment in the NPRM, FCC officials have said (CD Aug 16 p3). The discount would be an incentive for UHF stations to move to VHF, freeing up valuable UHF spectrum, said PMCM. Such a discount should be limited to the lower VHF bands “to reflect the disability that such stations operate under relative to UHF stations,” said PMCM. “This would be in keeping with the intent of the original UHF discount and would also further incentivize large multiple station owners to relocate to the VHF band without incurring multiple ownership penalties,” said the ex parte.